TOPLINE Netflix is one of the few companies actually thriving during the coronavirus, hitting an all-time high in the market Thursday after becoming more valuable than rival entertainment giant Disney.
The streamer’s stock climbed 5% by midday, after closing at a record price of nearly $427 per share on Wednesday.
With viewers turning to hits like true-crime documentary Tiger King and comfort-food reruns like The Office and Cheers, Netflix is seeing a spike in new subscriptions, according to streaming analytics firm Antenna.
Aside from increased viewership, Netflix is seeing another benefit from the crisis: like the rest of Hollywood, it has had to halt production, says Lightshed partner and analyst Rich Greenfield, freeing up its cashflow as it accumulates revenue.
What’s good for Netflix is also good for its cofounder and CEO Reed Hastings — his net worth is now $4.9 billion, a $1.2 billion increase since the end of March.
$194 billion. That is how much Netflix NFLX is now worth, having increased its market value more than $50 billion so far this year. Disney DIS, having been hit particularly hard by the coronavirus, is valued below $184 billion, down from nearly $258 billion at the end of 2019. Disney and Netflix are two of the heaviest hitters in entertainment, but they have opposite approaches. While Netflix is entirely dependent on paid subscriptions for revenue, Disney is much more varied, as reliant on tourism and merchandise sales as it is on the content it puts out. While that diversity has traditionally been its strength, it has become a liability as the pandemic forces Disney to shut down theme parks and delay film releases.
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While that pause in production may be good for Netflix’s bottom line now, it could result in significantly less new content in the fall than planned. Even so, Netflix may still be better off than its competitors. “The reality is they have much more content in the pipeline than anyone else right now,” says Greenfield.